Loan Guaranty Service

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VA Benefits Briefing

Transition Tools for a Brighter Future

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What is a VA Guaranteed Home Loan?

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VA-Guaranteed Home Loans are made by private

lenders, such as banks, mortgage companies and credit unions. These loans are made to eligible Veterans for the purchase of a home for their own personal

occupancy.

VA guarantees the loan to protect the lender against loss if the payments are not made.

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What can a VA-Guaranteed Home Loan be used for?

VA-Guaranteed Home Loans can be used to:

Buy or construct a home

Buy a condo

Buy a manufactured home and lot

Repair, alter, renovate and improve a home

Refinance an existing lien

Can be used for property located in the US, its territories or possessions

X Cannot guarantee Business Loans (contact SBA)

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What are some advantages of a VA-Guaranteed Loan?

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Advantages of VA-Guaranteed Home Loans

Generally no down payment

No Private Mortgage Insurance (PMI)

Freely negotiable interest rate

No prepayment penalty

Benefit never expires - can be used more than once

Entitlement may be restored

VA assistance to Veteran borrowers experiencing temporary financial difficulty (877) 827-3702

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Loan Limits

There is no maximum loan amount; however, there are maximum loan “limits” – loans above

this limit will likely require a downpayment. Loan limits vary by county.

Minimum guaranteed loan limit is $417,000 (assuming full entitlement)

Find the county loan limit:

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Native American Direct Loans

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VA makes direct loans to Native Americans living on Trust Land (reservations, homelands)

Maximum loan limit is the same as for guaranteed loans

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Funding Fee

The law requires a funding fee to be paid on VA loans

Fee ranges from .5% to 3.3%, depending on loan type and if first-time or second-time user

Fee can be included in the loan

Fee is waived for Veterans entitled to VA disability compensation* and surviving

spouses in receipt of Dependency and Indemnity Compensation

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What are the steps to obtaining a home?

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Here are the typical steps to obtaining a VA-Guaranteed Home Loan:

Apply for a Certificate of Eligibility (eBenefits)

Obtain pre-approval from a lender

Find a property to buy

Complete application process with lender

Lender obtains a VA appraisal

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Eligibility

Active Duty: Generally, must serve 24 months of continuous active duty or the full period for which called or ordered to active duty (at least 90 days) unless discharged for a service-connected disability.

Guard/Reserve: Requires a total of 6 years of service unless activated or discharged for service-connected disability.

Certificate of Eligibility (COE) shows

Servicemember’s or Veteran’s eligibility for the benefit - COE must be updated upon

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Requirements

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Must satisfy eligibility criteria

Loan must be for eligible purpose

Must occupy or intend to occupy (spouse and dependent children may satisfy occupancy requirement)

Income must be stable, reliable, and sufficient

Must have satisfactory credit

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Useful Information

Loan Guaranty Service:

http://www.benefits.va.gov/homeloans/

VA Pamphlet 26-7, VA Lender’s Handbook

Title 38 – United States Code, Chapter 37

Regional Loan Centers:

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Specially Adapted Housing/Special

Home Adaptation Grants

SAH grant programs improve the quality of life for

severely disabled Veterans by allowing them to live more independently in their homes.

Over the last two years, the SAH workload has

increased significantly; the number of grants approved has increased over 50%.

Legislative changes have expanded eligibility criteria,

allowed for multiple grant uses, increased grant amounts and allowed for yearly adjustments based on a cost of construction index.

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Specially Adapted Housing/Special Home Adaptation

Specially Adapted Housing (SAH)/Special Home Adaptation (SHA) Grants can be used to help accommodate home, purchase adapted home,

purchase land to build home, build home on land owned by veteran.

Temporary Residence Adaptation (TRA) Grants can be used to modify the home of a family member.

CURRENT Maximum Amounts

SAH: $64,960

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SAH Program Structure

38 USC

§

2101(a) Specially Adapted Housing

(SAH) Grant Eligibility

Loss or loss of use of both lower extremities

Blindness in both eyes plus loss of one lower extremity

Loss or loss of use of one lower extremity together with: 1. residuals of organic disease or injury, or

2. the loss or loss of use of one upper extremity

Loss of both upper extremities, at or above the elbows

Certain severe burn injuries

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Specially Adapted Housing

Public Law 112-154 changes

Applies to Veterans who served and became permanently disabled after September 11, 2001

due to the loss or loss of use of one lower extremity, severely affecting the functions of balance or propulsion

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SHA Program Structure

38 USC

§

2101(b) Special Housing Adaptation

(SHA) Grant Eligibility

Blindness in both eyes with 20/200* visual acuity or less

Anatomical loss or loss of use of both hands

Certain respiratory ailments

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SAH/SHA Grants

Can be used a maximum of 3 times

Can be adjusted annually based on the Turner Index

In FY2010, VA approved

1,421 §2101(a) grants totaling over $64.97M

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Temporary Residence Adaptation Grant

38 USC §2102A Temporary Residence Adaptation (TRA)

Grant Eligibility

Based on eligibility for 2101(a) or 2101(b) grant

Used to modify the home of a family member

Can be used only once

Is counted as one of the three allowable uses

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Regional Loan Centers

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Denver Phoenix Houston St. Paul St. Petersburg Atlanta Roanoke Cleveland

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Questions?

You can find a list of RLCs and Specially Adapted Housing agents (and their contact information) at:

http://benefits.va.gov/homeloans/ Betty Rhoades

Chief, Specially Adapted Housing [email protected]